22 Mar Investor Calls for Speed & Courage
Tampere Chamber of Commerce and Industry Magazine, Tampere, Finland – Global investors Monita K.Mo and Jörg Buchholz from Ascend Capital Partners visited Tampere to invest in local companies, calling for companies to be courageous in the face of opportunity.
Mo and Buchholz returned to Tampere in February to make further enquries with companies having already visited the region last autumn following Slush in order to invest in them and help them to enter the China market.
“We are not looking for start-ups in their most nascent stage of development, but rather companies employing 20 to 50 people with revenues in the range of €3 million to €5 million, and who are ready and willing to grow. We are also interested in smaller start-ups that have about €1 million revenues, employ 8 to 10 people, and demonstrate real innovation with promising technologies. Crucially, we find that the company’s team is important because the team is what makes their ideas into reality.”
Where do you see your company in two years?
After meeting several companies Mo and Buchholz were surprised by some of their observations, typically telling companies, “you have enormous technological capabilities and talent, but where is your passion? Drive? Courage?”
Monita Mo notes intently, “we invest invest quickly and directly – if we are interested in a company, we will ask how much capital they require, and where they see themselves in two to five years. And we’re not talking about a mere tens of thousands of Euros, but rather in millions of Euros – amounts that can really empower growth. Disappointingly, the response we usually receive is ‘We don’t need the money yet, we’ll first get our product fully developed, then think about raising capital in two years’ time’.”
Buchholz adds that Finnish people have a tendency to wait for a fully developed product before beginning sales, whereas other start-ups tend to begin selling at an earlier stage.
“Finns want certainty and lack aggression. However, a new product or idea must be brought to market quickly, otherwise the advantage of being a first-mover will be lost. Finns should therefore be bolder, and not be afraid when facing the wider world!”
One observation is that if a Finnish company wants to grow and become international, they have to hire people for R&D product development. Whereas most companies outside of Finland invest in sales and marketing employees.
“We were very impressed by what the companies we visited had achieved within a short space of time. We feel as if many companies here could be ‘hidden champions’”, says Jörg Buchholz.”
“When a company is founded by a group of engineers, ownership tends to be equally divided. This can result in hesitation among leadership, slow decision making, and a slow moving company.”
“We are investing our own money, and want to proceed quickly in doing so. If the investee company doesn’t have an obvious majority owner, decision making may take additional time. We usually like to hold discussions with one key person – the one with the power to make crucial decisions for the company.”
Investing as a part of problem solving
Finns are known for their reserved, hesitant, and play-it-safe nature. Mo and Buchholz have now become familiar with these features.
Mo and Buchholz emphasize that they have deep-seated experience as entrepreneurs and investors across China, Germany and USA. Monita explains that she has worked in both small and large corporations, and has been founding a company ‘every ten years’. She has been an investor for over 30 years and has invested in more than 30 companies, producing stellar results. Buchholz has a strong background in the automotive industry, and has been working in the same field as Mo for ten years.
“Having had discussions with local entrepreneurs, we now really know where they stand. We have been in same situations ourselves.”
“We do not necessarily want to become majority owners. We don’t want to participate in daily operations, but rather to develop the business. We build operating teams and help to develop even better ways to make decisions and do business.”
Mo laughs and says she has an adventurous spirit and that being an investor in different countries with their different cultures does not intimidate her – Tampere is no exception.
“I think investing is a part of problem solving. When you you solve problems, you will make money.”
Investors Monita K. Mo and Jörg Buchholz thank the City of Tampere, Tredea, the Tampere Chamber of Commerce, Finpro Kirsi Koko, and their consultant Heikki Tarvainen, for helping Ascend Capital Partners getting introduced to Finland. “Extensive networking is a strength. People know each other and can easily talk to them,” Mo and Buchholz say.